Surrender of TAN (Tax Deduction and Collection Account Number)

The Tax Deduction and Collection Account Number (TAN) is a 10-digit alphanumeric number issued by the Income Tax Department of India. It is mandatory for entities responsible for deducting or collecting tax at source (TDS/TCS) to obtain a TAN. However, there may be situations where you no longer need a TAN (e.g., if your business has ceased operations or you are no longer required to deduct/collect tax). In such cases, you can surrender your TAN.

Below is a detailed guide on the surrender of TAN, including the process, requirements, and important considerations.

When Can You Surrender Your TAN?

You can surrender your TAN in the following situations:

1. Your business or entity has ceased operations.
2. You are no longer required to deduct or collect tax at source (TDS/TCS).
3. You were issued multiple TANs and want to surrender the duplicate or unused ones.

Process to Surrender TAN

The process to surrender a TAN involves informing the Income Tax Department about the discontinuation of its use. Here are the steps:

Step 1: Prepare a Surrender Letter

• • Write a formal letter requesting the surrender of your TAN.
  • Include the following details in the letter:
    • TAN to be surrendered.
    • Name and address of the entity.
    • Reason for surrendering the TAN (e.g., cessation of business, no TDS/TCS obligations).
    • Date from which the TAN is no longer required.
    • Contact details of the authorized signatory.

Step 2: Attach Supporting Documents

• • Attach supporting documents, such as:
    • Proof of cessation of business (e.g., closure certificate, dissolution documents).
    • Copy of the TAN allotment letter (if available).

Step 3: Submit the Letter to the Assessing Officer

• • Submit the surrender letter and supporting documents to your jurisdictional Assessing Officer (AO)or the Tax Deduction and Collection (TDS) Officer.
  • You can submit the documents in person or send them via post.

Step 4: Confirmation from the Income Tax Department

• • Once the Assessing Officer processes your request, you will receive a confirmation of the surrender.
  • Ensure that the surrendered TAN is no longer used for any TDS/TCS filings.

Points to Remember during Surrender of TAN

1. No Online Surrender Facility
   • Currently, there is no online facility to surrender a TAN. You must submit a physical letter to the Assessing Officer.
2. Update TAN in TDS/TCS Returns
   • If you have filed TDS/TCS returns using the TAN, ensure that all filings are up to date before surrendering it.
3. Duplicate TANs
   • If you have multiple TANs, surrender the duplicate ones to avoid penalties. The Income Tax Department imposes a penalty of ₹10,000 for holding multiple TANs.
4. Inform Deductees/Payees
   • If you have deducted TDS using the TAN, inform the deductees (e.g., employees, vendors) about the surrender and provide them with the necessary documents (e.g., Form 16, Form 16A).
5. Keep Records
   • Maintain a copy of the surrender letter and confirmation from the Income Tax Department for future reference.

Consequences of Not Surrendering an Unused TAN

• If you no longer need a TAN but fail to surrender it, you may face penalties for non-compliance.
• Holding multiple TANs can lead to confusion in TDS/TCS filings and attract penalties.

Sample Surrender Letter Format

[Your Name/Entity Name]
[Address]
[City, State, PIN Code]
[Date]

To,
The Assessing Officer,
[Address of the Assessing Officer]

Subject: Request for Surrender of TAN

Dear Sir/Madam,

I/We hereby request the surrender of my/our Tax Deduction and Collection Account Number (TAN) [Insert TAN]. The details are as follows:

• Name of Entity/Individual:[Your Name/Entity Name]
• TAN to be Surrendered:[Insert TAN]
• Reason for Surrender:[Cessation of business/No TDS/TCS obligations/Duplicate TAN]
• Date from which TAN is no longer required:[Insert Date]

I/We have attached the necessary supporting documents for your reference. Kindly confirm the surrender of the TAN at the earliest.

Thank you for your assistance.

Yours sincerely,
[Your Name]
[Designation]
[Contact Details]

Enclosures:

1. Copy of TAN allotment letter.
2. Proof of cessation of business (if applicable).